An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Tuesday, September 14, 2010
Small business aid bill set to clear the senate
Another hollow victory for Obama. The bill will give money to banks, with the intention that they make loans. Apparently no one in the Administration understands banking, because lending is not constrained by reserves. How do they expect banks to lend to businesses without customers and sales when no one has a job or where millions have seen their incomes reduced to nothing??? Can't anyone in the Administration figure this out???
This money will sit on banks' books, just like TARP and other, similar measures. Or worse, it will go to big bonuses again for bank executives. It's looting the taxpayer to give money to business executives in the financial sector. Scandalous!!! We should have a revolt against this shit once and for all!!!
Here's another one sneaking through. I would not have picked it up if Hudson did not point it out. It's brief.
ReplyDeleteMichael Hudson, That $50 Billion "Infrastructure" Plan: Obama's Thatcherite Gift to the Banks
...What President Obama did not acknowledge is a basic principle that every transportation economist is taught: Transport investment normally can pay for itself, simply by a windfall-gains tax enabling cities or other jurisdictions to recapture the higher rent-of-location and site value along the right-of-way....
Tom,
ReplyDeleteWith new home sales at 300k/mo and auto sales in the toilet due to lack of income, this is how these broke D--K banks have to find loan volume these days...just get it from their lackeys in the Govt directly! Just get the govt to "borrow" balances that should just be directly appropriated. This is another outrage.
wrt to Mikes post, Small business doesnt need loans they need customers!
I cant wait for election time to be over... then maybe we can get a firmer picture of future policy.. Obama keeps doing these %50B bandaids...we need trillion(s).
Resp,
Zombies, that's what the banks are...
ReplyDeleteIt's not Japan since they had a savings glut at the start of their asset bubble pop. They did not lose their retirements.
The lost decade in America will not be like Japan because we do not have savings to loan out like Japan did.
We are in a different sort of liquidity trap - The Chinese ownership of US treasuries means that we allowed the Chinese to open up an account in USD to be paid in USD. They get the money to do this from their exports which are sold in USD and never is one single Renmibi Yuan ever exchanged to U$D.
The Chinese simply have not returned the favor and bought anything American.
They balanced the global budget to their favor and we know that balanced budgets and surpluses cause crashes like when Clinton did so in 1999/2000 which pulled money out of the real economy.
It's the war, the Chinese, and all the Republican't Nixonites who want to coddle with the Chinese goldfish.The lost decade in America will not be like Japan because we do not have savings to loan out like Japan did.
We are in a different sort of liquidity trap - The Chinese ownership of US treasuries means that we allowed the Chinese to open up an account in USD to be paid in USD. They get the money to do this from their exports which are sold in USD and never is one single Renmibi Yuan ever exchanged to U$D.
The Chinese simply have not returned the favor and bought anything American.
They balanced the global budget to their favor and we know that balanced budgets and surpluses cause crashes like when Clinton did so in 1999/2000 which pulled money out of the real economy.
It's the war, the Chinese, and all the Republican't Nixonites who want to coddle with the Chinese goldfish. Then there's the democrats who are only on demo and not the real thing.